What should be our real budget choices?

Bangladesh's greatest fiscal challenge is not deciding how much to spend. It is deciding what must never be sacrificed when resources become scarce.

As inflation squeezes households, businesses struggle with rising costs and the government faces tighter fiscal constraints, the country's biggest economic question is no longer how much to spend. It is what not to spend on. Every unnecessary taka spent today is a taka unavailable for tomorrow's productivity, resilience and opportunity.

This principle lies at the heart of every successful economy. When resources become scarce, wise societies do not cut everything equally. They distinguish between expenditure that creates future value and expenditure that merely sustains present consumption. The same principle applies whether the budget belongs to a family, a business or a government.

The FY2026-27 national budget demonstrates why this distinction matters. With a proposed outlay of Tk 9.38 lakh crore against a revenue target of Tk 6.95 lakh crore, Bangladesh faces a budget deficit of Tk 2.43 lakh crore. Development expenditure has been allocated Tk 3.16 lakh crore, while domestic borrowing is expected to reach Tk 1.27 lakh crore, including Tk 1.12 lakh crore from the banking sector. These figures are more than fiscal statistics; they represent choices that will shape Bangladesh's long-term economic resilience.

The wider macroeconomic picture reinforces that reality. According to the Bangladesh Bureau of Statistics, inflation stood at 9.04 percent in April 2026, continuing to erode purchasing power. At the same time, the World Bank estimates Bangladesh's tax-to-GDP ratio at only 6.7 percent, among the lowest in Asia, while the International Monetary Fund projects GDP growth of 4.7 percent in FY2026, well below the government's target of 6.5 percent. Although remittance inflows increased by nearly 20 percent during July-April FY2026, fiscal space remains constrained by modest domestic revenue mobilization and rising financing costs.

The numbers point to one unavoidable conclusion. Bangladesh does not simply need a bigger budget; it needs a smarter one.Countries rarely experience fiscal stress because they spend too little. More often, they struggle when limited resources are not consistently directed towards the highest-return priorities.

The lesson begins at home. When financial pressure intensifies, families often reduce spending on nutrition, children's education, preventive healthcare and the maintenance of income-generating assets before cutting discretionary consumption. These decisions may ease short-term financial pressure, but they quietly weaken future earning capacity.

Bangladesh can ill afford such choices. UNICEF estimates that 24 percent of children under five remain stunted, 12.9 percent are wasted and nearly two-thirds of children aged six to twenty-three months experience food poverty. Protecting nutrition, education and preventive healthcare is therefore not merely a social obligation. It is an investment in the country's future workforce and productivity.

World Bank estimates Bangladesh's tax-to-GDP ratio at only 6.7 percent, among the lowest in Asia, while the International Monetary Fund projects GDP growth of 4.7 percent in FY2026, well below the government's target of 6.5 percent.

Encouragingly, the government has introduced measures such as mandatory A-Challan for revenue collection, rationalization of tax exemptions, VAT incentives for registered startups and the withdrawal of the specific tax on mobile SIM cards. These reforms aim to improve efficiency and support productivity. However, effective implementation remains one of Bangladesh's most important challenges.During July-April FY2026, the Annual Development Programme achieved only 35.43 percent of its annual target, while National Board of Revenue collections reached just 65.52 percent of the annual target. Budgets create opportunities, but institutions deliver results. Without stronger implementation, even a well-designed budget cannot fully achieve its intended economic and social impact.

Families should protect human capital before lifestyle. Safeguard nutrition, education, healthcare, emergency savings and income-generating assets while reducing unnecessary consumption, prestige spending and expensive debt.

Businesses should protect productivity before short-term profits. Eliminate inefficiency before cutting investment in maintenance, technology, employee capability, customer relationships and governance.

Policymakers should protect future growth before administrative convenience. Reduce procurement waste, project delays, administrative duplication and poorly targeted tax exemptions before compromising investment in education, healthcare, agriculture, digital infrastructure and climate resilience.

The banking sector also has a critical responsibility. As economic conditions become more challenging, banks should continue strengthening productive lending, improving credit quality, accelerating digital transformation and enhancing financial literacy. Stronger banks are built through prudent risk management and efficient capital allocation, not indiscriminate cost cutting.

Singapore's experience demonstrates that fiscal resilience is achieved not by spending less across the board but by spending better, investing consistently in people, institutions and productivity while maintaining strict accountability. Bangladesh's path will be different, but the principle is universal.

Every budget is ultimately a statement of national priorities. Bangladesh's future will depend less on how much it spends and more on how wisely it invests every taka. When money becomes tight, cutting wisely is not simply an economic necessity. It is a measure of national leadership.